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Entry may increase network providers' profit

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  • Foros, Øystein
  • Kind, Hans Jarle
  • Sand, Jan Yngve

Abstract

In this paper the incentives for platform sponsors to open up their networks for independent rivals is analyzed. It is shown that open access may increase the platform sponsors' profit levels and enhance quality improving investments. In addition, it is shown that a commitment to allow entry reduces the difference between ex ante and ex post compatibility incentives.

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Bibliographic Info

Article provided by Elsevier in its journal Telecommunications Policy.

Volume (Year): 33 (2009)
Issue (Month): 9 (October)
Pages: 486-494

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Handle: RePEc:eee:telpol:v:33:y:2009:i:9:p:486-494

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Related research

Keywords: Compatibility Investment incentives;

References

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  15. David Mandy & David E. M. Sappington, 2004. "Incentives for Sabotage in Vertically Related Industries," Working Papers 0404, Department of Economics, University of Missouri, revised 16 Dec 2004.
  16. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
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